The CRTC has decided not to review the level of foreign ownership in Vancouver telecom company Telus Corp. (TSX:T), saying Telus is following the compliance rules.
The telecom regulator said Tuesday that it has denied a request by new wireless competitor Wind Mobile to review foreign ownership of Telus (TSX:T).
The Canadian Radio-television and Telecommunications Commission said it’s satisfied with Telus’s mechanisms to comply with foreign ownership requirements, which must not exceed 33.3 per cent.
Wind Mobile failed to demonstrate that Telus’s board of directors had any reason to question information received about the level of foreign ownership, the CRTC said in its written decision.
“Further, the commission is satisfied that Telus’s mechanisms for ensuring its compliance are consistent with the provisions and requirements established in the regulations,” the CRTC said.
The CRTC also said the onus is on carriers at all times to ensure they are complying with foreign ownership limits.
“The commission notes that the regulations establish the type of documentation required to demonstrate a shareholder’s Canadian status. They also establish that, before taking any additional action, the carrier’s board of directors must have information that causes it to believe that the declarations it has received are incorrect.”
When Globalive made the complaint last summer, Telus had reported that its foreign ownership was 32.6 per cent.
More recently, Telus said its foreign ownership had dropped to about 15 per cent, largely due to a U.S.-based hedge fund selling a chunk of its stake in the company.
Telus spokesman Shawn Hall said Wednesday the decision verifies that Telus’s foreign ownership controls are effective.
“The issue that Globalive put forward simply didn’t exist,” Hall said.
Toronto-based Globalive is the parent company of wireless carrier Wind Mobile.
Wind Mobile said it’s disappointed with the decision not to hold a public review of Telus’s compliance with foreign ownership restrictions.
“We consider this a missed opportunity for the commission to provide all industry players with much-needed guidance and clarity on these important matters,” Simon Lockie, Wind’s chief regulatory officer, said in a statement.
Telus has said its foreign ownership levels are measured daily and it’s a manual count of all shareholders.
Telus had argued that Globalive had used reports from Broadridge Financial Solutions, which uses postal or zip codes from where account statements are mailed, rather than the actual citizenship of the owner to determine foreign ownership levels.
The CRTC said that Wind Mobile noted that Broadridge reports didn’t provide conclusive evidence of non-compliance with foreign ownership, but the smaller telecom company had argued the reports raised questions about how Telus met foreign ownership requirements.
The CRTC said that Broadridge reports do not use residential addresses of shareholders and that both parties had acknowledged that.